Terra Nitrogen Company, L.P. (TNH)

jcrash (95.15) Submitted: 9/13/07 11:45 AM

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No, actually all the earnings don't go to TRA. 50% of the earnings above a threshold do. That threshold is high enough to justify a good stock price.

Do your research next time.

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TMFmrchw (98.31) Submitted: 9/14/07 10:27 AM

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Thanks for the thoughtful and courteous reply.

After the next $8.18 in earnings, 50% of all earnings over $1 in EPS go to the GP. So for them to maintain their $12 Dividend, they'd have to earn about twice that per share before the profit split. The $3.02 they earned this quarter would be under $2 after the profit split. Considering I don't see how they managed to increase earnings so sustantially to cover the profit split, the dividend is going to be cut.

I'm sorry the use of my word "all" offended your great pick. Check back in a year and we'll see who made the right call.

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jcrash (95.15) Submitted: 9/14/07 4:32 PM

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So, what you are saying is that we have $8.18 to count on...then a reduction of 50% of the amount over $1 per share per quarter?

So, a $4 dividend minimum? Say they earn $8/share next 12 months ...we get $8....After that we get $6...sounds like a price of $100-120 would be about right...assuming no earnings growth. Good pick at $90/share. Yielding better than a CD or MM account.

If you don't think the earnings can be sustained...for now at least Nat Gas is just off its lows. Wheat and corn are near their highs...sounds like this quarter will be better than last quarter.

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AnomaLee (99.49) Submitted: 11/20/07 5:39 PM

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Ditto... I ended this pick on CAPS, and I bought and sold off in real life.

Future dividends are fantasy. Why haven't they been paid yet? You have to understand that this just happens to be a publicly traded subsidiary. Hence, the high ownership and low P/E relative to its peers.

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ThePortMgr (94.21) Submitted: 2/08/08 12:46 PM

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This analysis is correct. Since the loss deficit is close to being paid back to the limited partners, the next distribution (if its greater than 2.86 and if history is any guide it should be) should trigger the partnership economics so that the GP takes 50% of earnings. For TRA the economics remain the same, since they get the money via the GP interest rather than the 75% they own in TNH shares, but the minority shareholders that own the other 25%(us) get screwed since our dividend will go down assuming the distributions remain flat. Unless earnings go up dramatically to compensate, dividend yield on this stock is going to dive by a lot.

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tinmanmf (57.63) Submitted: 7/17/08 6:12 PM

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Surprise! Dividends rose to over $4 /qtr since the last post. What do you suppose it will be the next qtr?

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